Post-Employment Restrictions / Restrictive Covenants
As an employer, you may be required to draft clauses in employment contracts that prevent employees from engaging in certain activities after they leave your company, such as restricting them from joining a competitor, soliciting clients, or using confidential information.
To safeguard your business’s sensitive information, client relationships, and supplier connections, it’s crucial to have protective measures in place in case an employee departs unexpectedly.
Our team of specialist employment law solicitors is here to guide you through this process, ensuring your contracts provide the necessary legal protection.
What are restrictive covenants?
A restrictive covenant is a contractual clause that restricts an employee’s actions after leaving their job. These clauses are designed to safeguard the employer’s business interests by preventing former employees from soliciting clients, colleagues, or suppliers and from misusing confidential information.
Are restrictive covenants enforceable?
There is a common misconception that all such clauses are unenforceable. Whilst the law regarding the enforceability of restrictive covenants is complex, if they are drafted correctly these types of restrictions can certainly be used to provide your business with important protection from former employees.
To be enforceable they must meet the following criteria:
- Legitimate business interest – the employer must show that the covenant protects a legitimate business interest, such as client relationships, confidential information, or workforce stability.
- Reasonableness – the covenant must be reasonable in scope, duration, and geographical reach.
- Necessity – the covenant must not go further than is necessary to protect the employer’s interest.
- Drafting – the covenant must be well drafted.
What happens if an employee breaches a restrictive covenant?
If an employee breaches a restrictive covenant in their employment contract, their former employer may take legal action, which could lead to a court-issued injunction to halt the breach or a claim for financial compensation to recover any resulting losses. In more severe cases, the employer may also pursue legal action against the new employer if they knowingly encouraged the violation.
How we can support you
Our specialist team of employment law solicitors can assist you in drafting restrictive covenants for your contracts that are enforceable and that accurately reflect the circumstances of your business.
Should one of your employees act in breach of their restrictions, we can also provide your business with robust representation to enforce the contract, including the pursuit of High Court action if necessary.
If you need expert advice on post-employment restrictions, call our employment solicitors today for a confidential consultation.
Our employment solicitors can also advise you on any of the following issues:
